True M or False IF1?: Write your response in the Answer Sheet at the end of this exam-booklet. 1) GAAP requires reporting inventory at net realizable value, even if above cost, whenever there is a controlled market with a quoted price applicable to all quantities. 2) The purpose of the floor" in lower-of-cost-or-market considerations is to avoid overstating inventory 3) Application of the lower-of-cost-or-market rule results in inconsistency becausea company may value inventory at cost in one year and at market in the next year 4) When a company makes an unconditional promise to pledge an asset in the future, the company should report the contribution expense and related payable immediately. 5) If a nonmonetary exchange lacks commercial substance, and cash is received, a partial gain or loss is recognized. 6) Depreciation, depletion, and amortization all involve the allocation of the cost of a long- lived asset to expense. 7) The asset turnover is computed by dividing net sales by ending total assets. 8) The inventory turnover is computed by dividing the cost of goods sold by the ending inventory on hand. 9) The units-of-production approach to depreciation is appropriate when depreciation is a function of time instead of activity. 10) When land with an old building is purchased as a future building site, the cost of removing the old building is part of the cost of the new building. 11) An impairment loss is the amount by which the carrying amount of the asset exceeds the sum of the expected future net cash flows from the use of that asset